CANADA STOCKS-TSX slumps on soft global data

Reuters Staff

4 Min Read

* TSX down 101 points, or 0.8 percent, to 12,231.79
* Materials, energy shares lead losses
* U.S., Europe data weighs on commodities
* Barrick shares fall 2 percent after soft earnings
By Jon Cook
TORONTO, May 2 (Reuters) - Toronto's main stock index was
sharply lower on Wednesday, threatening its five-day rally, as
resource issues were hurt by weak data in the United States and
Europe that dented hopes of a global economic recovery.
Data in the United States painted a more negative picture a
day after strong manufacturing numbers. U.S. payroll processor
ADP said companies added 119,000 jobs in April, falling short of
the expected 177,000 increase and the smallest monthly rise in
seven months.
Also, new orders for U.S. factory goods in March recorded
their biggest decline in three years, government data showed on
Wednesday.
"ADP was definitely weaker than what people were expecting,
which puts pressure on assumptions for nonfarm payrolls coming
up on Friday," said Sid Mokhtari, market technician and
director, institutional equity research, CIBC World Markets.
The U.S. Labor Department will release its April jobs report
on Friday with economists expecting employers likely added
170,000 jobs in April.
Weakness in the U.S. labor market threatens the American
recovery effort, which could impact growth in Canada, its
largest trading partner.
At 11:25 a.m. (1525 GMT) The Toronto Stock Exchange's
S&P/TSX composite index was down 101 points, or 0.8
percent, to 12,231.79.
Nine of 10 main sectors in the index were lower. The heavily
weighted materials and energy groups led the losses, both
falling 1.3 percent as metals, gold and oil prices sank.
Barrick Gold was the most influential decliner,
down 2 percent to C$39.09, after the world's largest gold miner
reported a first-quarter profit on Wednesday, but investors
remained concerned about underlying production costs.
"Costs were higher and the copper production was not what
everybody was expecting so that's putting pressure (on the
stock)," said Mokhtari.
Other resource firms weighing on the downside, included
Goldcorp, down 1 percent to C$37.72, First Quantum
Minerals, down 3 percent at C$19.85, Teck Resources
, which fell 1.5 percent to C$36.65, Canadian Natural
Resources, down 1.5 percent to C$34.18, and Cenovus
Energy slid 2.5 percent to C$35.24.
Earlier, data from the euro zone showing a deepening
contraction in manufacturing in the region intensified worries
that even its strongest economies are buckling from the
contagion of the fiscal woes of their heavily indebted
neighbors.
Financial shares slid on the news, dipping 0.7 percent, with
Toronto-Dominion Bank falling 0.6 percent to C$82.39 and
Royal Bank of Canada down 0.6 percent to C$56.48.
Research In Motion also continued its swoon from
Tuesday, sliding nearly 4 percent to C$12.83 as investors were
unimpressed after the struggling BlackBerry maker gave
developers a glimpse of its next-generation BlackBerry 10
smartphone.
"There is no investor confidence in RIM at all," David
Cockfield, portfolio manager at Northland Wealth Management,
told Reuters on Tuesday. "It will have to do something fairly
spectacular to turn things around."